Mexico drug wars threaten shale gas fields

MEXICO

The brutal Zetas gang poses one of the most daunting challenges to the development of Mexico's abundant shale gas reserves near the Texas border.

The gas fields extend from the booming Eagle Ford patch of South Texas deep into the ranch and coal country stretching inland from this violent border city. This is Zetas country, among the most fearsome of Mexico's criminal badlands.

U.S. and Mexican energy companies long have been besieged by the gangsters here - their workers assaulted, extorted or murdered - despite a heavy military and federal police presence. Now, with feuding Zetas factions bloodying one another and fending off outside rivals, what has been a bad situation threatens to get much worse.

Northern Mexico's gas production has suffered for years as gangland threats or attacks have kept workers from servicing the wellheads, pipelines and drilling rigs in the Burgos Basin, the territory between the Rio Grande and the city of Monterrey, which now provides up to 20 percent of Mexico's natural gas.

And now the Zetas bloodletting pits the gang's top bosses - Heriberto Lazcano and Miguel Angel Treviño - against Ivan Velazquez, a former underling known as "El Taliban." From his base in the western state of Zacatecas, Velazquez reportedly has allied with the remnants of other gangs to try to gain control of Coahuila state, which holds most of the shale gas reserves.

"Zetas are pretty much in control, but they have been challenged," said a U.S. official in Mexico who monitors the situation, speaking on condition of anonymity. "You have all these groups fighting one another, shifting alliances and internal fights ... It's a wilderness of mirrors."

The insecurity in Mexico's gas fields contrasts sharply with the drilling and production frenzy seizing the ranchlands just north of the border. Oil field pickups and semitrailer fuel tankers choke Highway 83, the once-desolate ranch-country highway that cuts northwest from Laredo though the lower reaches of the Eagle Ford.

Some 6,000 drilling permits have been issued for Eagle Ford shale in Texas, and 550 wells are producing there. By comparison, Pemex so far has drilled five exploratory shale gas wells, but hopes to drill 170 more in the next four years. The company plans to spend $200 million on exploration in the short term.